When Deciding How to Bet, Less Detailed Information May Be Better
People are worse at predicting whether a sports team will win, lose, or tie when they bet on the final score than when they bet on the overall outcome, according to a new study published in Psychological Science, a journal of the Association for Psychological Science.
Examining sports betting data from both the real world and the lab, psychological scientist Kwanho Suk and colleagues at Korea University Business School found that people who relied on more detailed information were actually less accurate in their predictions about sports match outcomes.
These results stand in contrast to the conventional wisdom that thoughtful deliberation improves decision-making:
“Our research suggests that predicting results — at least for sports matches — in a less deliberate way can actually improve prediction accuracy,” explained Suk.
Analyzing 1.9 billion bets from Korea’s largest sports-betting company from 2008 to 2010, Suk and colleagues found that people who bet on whether a soccer team would win or lose were better at predicting the overall outcome of the match than those who bet on the score.
They found the same pattern of results for betting on baseball games and the findings also held up in lab-based studies, in which Suk and colleagues assigned participants to make either win/lose/tie bets or score bets.
Data from the lab studies suggest that win/lose bettors are more accurate because they base their bets on general information about the sports teams, such as the teams’ overall performance in recent years.
Incorporating more detailed information in their betting decisions — considering, for example, a team’s defense, offense, and coaching ability — did not improve the accuracy of participants’ predictions.
“In everyday life, people often try to be specific to be accurate,” observe Suk and colleagues, but this new research suggests that specificity and accuracy don’t necessarily go hand-in-hand.
In weighing detailed information, we tend to give “greater weight to attributes that are more salient, justifiable, and easy to articulate,” say the researchers. As a result, we often lose sight of more general attributes that actually matter.
While these studies provide considerable evidence for a “specificity bias” in sports betting, Suk and colleagues believe that the bias is likely to play a role in many areas, including business decisions.